Final Project
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Final Project
Frito lay is the most well know snack food brands in the world. They have varieties of snacks like corn chips, popcorn, pretzels, tortilla chips, potatoes chips and pita chips but they are focusing on new brand which is called vegetable chips. They can increase their sale with this vegetable chips compare to potatoes chips. To market their products, it is very important for them to focus on marketing and sales efforts on specific segments of consumers. Target marketing is the best way to introduce new products.
“Segmentation is the process of grouping customers into market segments according to the benefits they seek from the product. Most types of market segmentation are based on the assumption that this variable and customers’ needs are related. Benefit segmentation is different because it groups potential customers on the basis of their needs or wants rather than some other characteristic, such as age or gender” (Capon, N., 2008).
Marketing and advertising people constantly scan the marketplace to see what needs and wants various consumer groups have and how they might be better satisfied. Frito Lay should use market segmentation which enables a marketer to design a marketing mix that more precisely matches the needs of consumers in a selected market segment. In the United States, target marketing of different ethnic groups is now common practice.
“Market segmentation and lifestyles are two related concepts that are potent strategies for satisfying consumer preferences and maximizing profitability. Lifestyle analysis is composed of consumers’ activities, interests, and opinions. Activities are classified as sports, work, entertainment, and hobbies” (Michman, R. D., et. al., 1998).
Market segments must be recognizable and accessible to a firm’s marketing strategies. Psychographic segmentation is a technique that can be used either separately or in combination with benefit segmentation to analyze the snack food market. Frito lay Segmentation approach like single or multiple target market strategies are preferred by many organizations. For our chosen product, vegetable chips from Frito Lay, channel management decisions are very hard to make due to mass target consumers. Frito lay should focus on many retail stores, wholesale, big stores, restaurants etc for our vegetable chips.
Channel management, whether by one manager or a group of managers, follows a process that is not a specific management function. Moreover, seldom will a company have complete control over a marketing channel. The only controllable channels are those that consist of company employees selling directly to the users of the company’s products. The marketing process that we call channel management is forever changing as a company introduces new products into its line of as the current products and markets mature. Policies, programs, products, prices, and even people change frequently in the marketing channel. This evolving environment requires managers to constantly evaluate what the changes mean and how they will affect the marketing objectives of the company.
Frito lay new product vegetable chips channel management decision will enable the organization to identify the combination of different channel members who can make our product valuable by providing products to the target markets. The key to effective management of a company’s marketing channel is not only to know what is going on in the channel but also how to plan marketing actions that will be successful with the company’s channel members.
The elements of the market profile that relate to channel management and organization are geography, people, and products, pricing, and marketing programs. Frito lay should add geography to the marketing mix, whereas physical distribution is eliminated. Effective penetration is very important for reaching the masses and garners the market share for our vegetable chips. Effective distribution is very important for launching new product which can enhance the presence of the product in as many stores as possible. For our produce vegetable chips we will arrange blends of distribution channels.
Frito lay vegetable chips should choose big box distribution channels like Walmart where our product reaches everywhere. We will sign distribution agreements with effective and strong regional chains like Publix in Florida or Wegmanns in western New York. In key regions of the U.S. We will set up the different distribution warehouses so that quick distribution takes place to the numerous retail locations.
We should also need to appoint key distributors of major areas in the USA who will provide our vegetable chip to neighborhood retailers, grocery stores, and restaurants etc. These all distributors would help our product to be promoted in different regions and will increase the value of our vegetable chips by supplying it to small retailers in the right manner. We should also need to get to link with online retailers so their sale increases nationwide which is the way to expand our presence in the country.
By doing our sale through internet due to the fact that it is very cost effective compare to traditional channels of distribution. Similarly, warehouse idea is very cost effective too because of eliminating the cost of middleman. Small neighborhood retailer is not providing large margins but it is still very appealing to penetrate to the remotest corners of the country.
Vegetable chip consumption is an important part of the snack food market. To satisfy various consumer segments, products must be differentiated. Some product differentiation methods include potato chip flavors: sour cream and onion, salt and vinegar, and white corn. Consciously, consumers many desire to eat properly, but when choosing a snack, chips seem to be viewed as a “deserved binge” because of the anxieties of life. This has resulted in an expanding vegetable chip market. Frito lay company policy requires that all stock purchased by the store must be opened and inventoried in the presence of the store manager. Frito Lay salespersons are authorized to merchandise store shelves by arranging displays and arranging the goods. Frito lay is an exceedingly successful company inasmuch as it has strongly defined markets, an in depth understanding of its customers, and the ability to motivate its employees to attain high quality and value for its customers. Frito Lay has a state of the art information system, and because there is strict attention to detail, the company has an excellent implementation record for strategic planning strategies.
References
Capon, N. (2008), Managing Marketing in the 21st Century. Retrieved from Google books.
Michman, R. D. & Mazze, E. M. (1998), The food industry wars: marketing triumphs and
blunders. Retrieved from Google books.